Shares up led by blue chip gains
Shares up led by blue chip gains
Dow Jones/Jakarta
Indonesian shares ended higher on Tuesday led by bargain-
hunting in telecommunication blue chips after the main index fell
in the previous three sessions, dealers said.
They said gains on several Asian markets improved local
sentiment, but concerns about interest rates kept overall
sentiment cautious.
The central bank on Tuesday raised its Bank Indonesia Rate to
8.75 percent from 8.50 percent to cope with rising inflation.
"The interest rate move spurred investors to continue
offloading shares that are sensitive to the interest rate
movement," said a trader with a foreign securities firm.
The Jakarta Stock Exchange's Composite Index rose 0.4 percent,
or 4.213 points, to 1162.799.
Gainers led decliners 56 to 38, with 76 stocks unchanged.
Volume fell to 1.25 billion shares valued at Rp 1.1 trillion,
compared with 1.4 billion shares worth Rp 1.25 trillion on
Monday.
Indonesian Satellite Corp. gained 4.6 percent to Rp 5,750 and
rival Telekomunikasi Indonesia rose 0.9 percent to Rp 5,400 on a
rebound after falling in the previous three sessions.
Dealers said investors continued to buy several mining blue
chips that have solid fundamentals and a bright outlook.
Coal miner Tambang Batubara Bukit Asam rose 6 percent to Rp
1,780 and nickel miner International Nickel Indonesia added 2
percent to Rp 15,600 on expectations of improved 2005 earnings
due to higher commodity prices.
On the downside, automotive company Astra International
succumbed to selling pressure on expectations of lower 2005 sales
as the high interest rate could dissuade people from buying cars
through bank loans.
Astra lost 0.9 percent to Rp 11,700.
Elsewhere, heavy equipment company United Tractors dropped
3.8 percent to Rp 4,400 on profit-taking after sharp gains last
week.
Dealers said they expect Indonesian shares to trade slightly
higher on Wednesday led by a further rebound in telecommunication
blue chips.
The Indonesian rupiah closed lower on Tuesday due to onshore
dollar demand and an absence of offshore dollar-selling, with on
Tuesday being a National Day holiday in neighboring Singapore,
dealers said.
The dollar closed at Rp 9,795 compared with Rp 9,772 on
Monday. The dollar rose to an intraday high of Rp 9,800.
Domestic dollar demand on behalf of Singapore's United
Overseas Bank was a significant factor that weighed the rupiah
down, a dealer at a foreign bank said, without elaborating.
Dealers said the currency market didn't react to a decision
earlier Tuesday by Bank Indonesia to raise its benchmark rate to
8.75 percent from 8.50 percent to contain inflationary pressures.
"The rate hike was quite expected," a dealer said.
Dealers said that local corporate are likely to maintain their
"healthy" appetite for dollars in the remainder of the week to
service overseas debt obligations.
"We'll likely see spot trading in a narrow range in the days
ahead, but the dollar could go higher," a dealer said.
The dollar will likely trade Wednesday between Rp 9,780 and
Rp 9,820, dealers said.